Ethiopia cuts power to Bitcoin miners by 75% as El Niño dries up hydropower

The Horn of Africa nation has become a major Bitcoin-mining hub, attracting Chinese and other global miners with some of the world’s cheapest electricity, per Bloomberg. Much of that power comes from hydropower, including surplus capacity associated with the Grand Ethiopian Renaissance Dam.

Bitcoin-mining companies accounted for 35% of Ethiopian Electric Power Corp’s revenue in the past financial year and consume almost a third of the country’s total electricity production of 9,730 megawatts.

The industry’s energy demand has also raised concerns over how Ethiopia allocates scarce electricity. About half of the country’s population still lacks access to electricity.

Mining one Bitcoin in Ethiopia requires an estimated 6.4 million kilowatt-hours of electricity, equivalent to the annual consumption of about 14,950 average Ethiopian households. Yet electricity costs around 3.2 cents per kilowatt-hour, making the country particularly attractive to miners.

Dry conditions squeeze hydropower supply

The current power cuts are driven by worsening water shortages. The El Niño weather phenomenon has intensified Ethiopia’s dry season, reducing water inflows into hydroelectric reservoirs by about 20%.